Does the 50% Rule Apply for New Construction?

[Kris Benson]

BP Team,

We are doing the underwriting on a development project where we hope to build 2 new 8 unit buildings with Class A apartment housing.

My question is what has your experience is with the "50% Rule" when it comes to new construction? What would a good estimate be for the annual pro forma for expenses? Obviously my expectation for CapEx costs are lower but curious if some of the more experienced developers on the site have developed their own expense guideline for new apartment construction.

Thanks!

Kris